Zi 

.bo 



.D7B9 



AGAIN 
THE QTY PAYS 



How William H. Reynolds, 
the Mayor's Friend, Turns 
His Dreamland Failure Into a 
$1,360,000 Success at the 
Taxpayer s' Expense 



BUREAU OF CITY INQUIRY 
1917 



I 



BUREAU OF CITY INQUIRY, 87 NASSAU STREET, 

NEW YORK, MAY 11, 1 917. 



HON. CHARLES S. WHITMAN, ^ '0 /oA 

GOVERNOR, STATE OF NEW YORK. --OvA^ 

Sir: 

On February 17, 1917, I submitted to you a report of the 
Bureau of City Inquiry on the purchase of Rockaway Park by 
The City of New York. The report revealed, among other things, 
a profit of 2,400 per cent, made by the Neponsit Realty Com- 
pany on forty-seven acres obtained from the State and included 
in the park sold to the city. 

In a communication accompanying the report I stated the 
report on its face appeared to bear proof of conspiracy to de- 
fraud both the State and the city, and requested investigation 
of the Rockaway Park purchase, together with other land deals 
with the city. 

I now beg to submit a report of the Bureau of City Inquiry 
on the city's purchase, still uncompleted after six years, of Dream- 
land Park. 

With this report I renew my request to you for an investi- 
gation of the Rockaway Park, Dreamland Park and other land 
purchases by The City of New York, all from a group of Brook- 
lyn land speculators of which William H. Reynolds is the head, ^ 
and with whom Frank Bailey, William M. Greve and Clifford S. 
Kelsey are associated as principals. 

I renew this request for the reason that John Purroy Mitchcl, 
at present Mayor of the City, and William A. Prendergast, Comp- 
troller, are responsible, by their official acts, as special cotrimittee- 
men and members of the Board of Estimate and Apportionment, 
for the city's part in the Rockaway Park. Dreamland Park and 
Dther land deals, and that there is no ground for hope of an official 
investigation by any constituted city office, such as the Commis- 
sioner of Accounts. Furthermore, both the Mayor and the Comp- 
troller have repeatedly reiterated in public their support of the 
city land deals in which William H. Reynolds has been involved. 

The bare facts show that the Senate, the Assembly, State and 
City officials have acted in furtherance of Reynolds' land schemes 
over a number of years. 

In 1906, when Reynolds was threatened with a real estate 
failure at Long Beach, Long Island, the State Legislature enacted 
a bill empowering the city to buy his Long I^each propertv for a 
seaside park; this notwithstanding the fact Long_ Beach lies in a 
county outside the city limits. This unique law is in the statute 
books as Chapter 456 of the Laws of 1906. 

When Reynolds failed to have the then city officials buy^Long 
Beach, his friends and business associates, Greve and Kelsey, 
turned up as the owners of the Rockaway Park propertv. which 
property was the onlv alternative for the seaside park then 



to be aciiuired by the city. Jn this Rockaway I'ark i)urchase 
Frank liailey was tinanci'ally interested and Keynoals nunscii 
testified for Greve and Kelsev. ( )n reports and recommendations 
by John I'nrrov Mitchel and' W'ilham A. Prendergasi, at present 
the chief officials of the city, this Rockaway Park pnrchase, in- 
volving in one detail a 2,400 per cent, profit, was consummated. 
By means of a joker in a Legislative act, and finally by means 
of a unanimous vote of the State Land Commissioners, the prop- 
erty on which this 2,400 per cent, profit was made was turned 
over bv the State to Greve, Kelsey, etc. Otherwise the property 
would have gone free of cost to the city. The joker is in the 
statute books as Chapter 568 of the Laws of 1909. The unani- 
mous vote of the State Land Commissioners is in the minutes of 
the commission for the year 1909. 

AVhen the city in 191 1 wanted land in connection with the 
South Brooklyn Marginal Railroad, Reynolds turned up as the 
owner of that land. Recommendation for its purchase also was 
made by John Purroy Mit^hel and William A. Prendergast. This 
land Reynolds acquired through four dummies, obtaining posses- 
sion of the last of it ten days before the city took its first official 
step or action to acquire the same. The prices paid by Reynolds 
w-ere from 35>^ to 60 cents a square foot. On the further 
recommendation of John Purroy ]\Iitchel and William A. Pren- 
dergast the city took an option on this land at $1.30 a square 
foot. 

The report I now submit reveals the same gross_ irregulari- 
ties in the case of the Dreamland Park purchase as in the case 
of the Rockaway Park and South Brooklyn transactions. The 
report quotes testimony by Reynolds in which he admits misrep- 
resentation to the city ; it shows John Purroy Mitchel and William 
A. Prendergast rejecting the opinion of the Chief Engineer of 
the city ; it shows the city at present committed by option to pay 
Reynolds $1,360,000 for property, which cost him $457,500; it 
shows Reynolds, after six years of delays, profiting^ still further 
to the extent of $1,153.86 every week. These are a few of many 
such facts revealed in the report. 

It is a matter of public right that all facts in regard to William 
H. Reynolds' land deals with the city be fully and finally uncov- 
ered and placed on official record. A searching and complete offi- 
cial investigation of all these transactions is necessary in the cause 
of just and good government. The known facts are of a nature 
demanding the full truth, irrespective of any question of political 
exigency, and apart from the fact that the official aid in these 
transactions has come to him frorn so-called reformers, placed 
in high office and supported there by leaders in the public and 
private life of the city. Respectfully, 

(Signed) WILLL\M BULLOCK. 

Director. 



THE REPORT SENT TO THE GOVERNOR: 

^Villiam H. Reynolds today has a bill for $360,000 in interest 
against the City on account of the uncompleted purchase of his 
Dreamland Park, and the total is increasing $1,153.86 every weeL, 

The City, by an option from Reynolds, has been paying him 6 
per cent, interest since August i, 191 1. In six years the tiual 
price has not been decided. It appears the exact i)rice will not 
be fixed for two or more years, and for all that time the City 
must pay Reynolds interest, this in addition to the purchase price. 

Already the interest cost to the City alone exceeds the asr-essed 
valuation of the land being bought from Reynolds. The a-- 
sessed total is $340,000, as against the present interest bill of 
$360,000. ]Moreover, the interest cost is growing $60,000 a year. 

On top of all this the City's option on the Reynolds property is 
$1,000,000. The Commissioners on Award at present sitting may 
decide on more or less than this sum, but whatever their decision 
may be the City must pay Reynolds 6 per cent, interest on tlie 
total purchase price for from six to eight years. 

Receiving 6 per cent, interest from the City on the $1,000,000 
option gives Reynolds 13 per cent, on the $457,500 he paid for 
the property. 

REYNOLDS PAID $457,500 AND GETS $1,758,000. 

The Dreamland proi)erty being taken by the City cost Reyn'O':. 
$457,500. Reynolds himself, when asking for decreased taxe.-. 
swore he had paid an "exorbitant price."' He further testified 
the property had not increased in value, this testimony being" 
given by him only three months before the City took its option. 

Yet the City's option, with interest, would give Re\nolds Si.- 
360,000 for the property today, or four times the assessed value. 
In addition to this, Reynolds already has 8398,000 for fire insur- 
ance collected following the Dreamland hre, making a total lA 
$1,758,000. 

A second Commission on Award now is taking testimony on 
Dreamland. In more than a year this Commission has not heard 
all of Reynolds' wdtnesses, and not one City witness has testifieil. 
It took tile first Commission more than three years to make i:.- 
award of $1,014,602.32, which award was set aside by the Appel- 
late Division of the Supreme Court as "largely excessive." Ti'e 
second Commission is proceeding with the same delav, and all t - 
time Reynolds is getting 6 per cent, interest. 

THE MITCHEL-PRENDERGAST COMMITTEE PUT 
THROUGH THE DREAMLAND DEAL. SIDE- 
TRACKING OTHER SEASIDE PARK PLANS 
WHICH WOULD HAVE SAVED THE 
CITY MILLIONS. 

John Purroy Mitchel and William A. Prendcrgast arc ihe City 
officials responsible for the Dreamland deal. 'J1iey controHed 
the special committee of the Hoard of j^stimate \yhich 
recommended and facilitated the piu-chase. As members of this 
committee thev got the P.oard of b'.stimate to accept no fewer 



than four options on Reynolds' property. The fourth and last 
o])tion, for $1,000,000, is the option in force todav. TlilS 
OPTION WAS GIVEN BY REYNOLDS WHEN J IIS 
DREAMLAND COMPANY NO LONGER OWNED THE 
PROPERTY. 

Tlie ^Mitchel-Prcndcroast committee forced the Dreamland 
deal through, notwitlistanding the fact the City might have re- 
claimed sixty-three acres of Coney Island frontage for an outlay 
of ::!>6o,ooo; and notwithstanding the fact the City might have 
obtained ninety acres of additional frontage for $2,250,000, with 
business establishments thereon returning profit sufficient to pay 
all carrying charges, including" the yearly interest on the pu:' 
chase price. In addition, this 90-acre offer carried with it oppor- 
tunitv for a nnmicipal bathing house to accommodate 8,000 per- 
sons.' BUT THIS OKEER AND THE EIRST. BOTH SO 
AD\'ANTAGEOUS TO THE PUBLK^ WERE P.RUSH ED 
ASIDE BY THE MITCHEL-PRENDERGAST COMMIT- 
Th:E IN ORDER THAT THERE ^ITGIIT BE NO HITCH 
IX THE DREAMLAND DEAL. 

REYNOLDS' DREAMLAND COMPANY WAS ON THE 

VERGE OF BANKRUPTCY, AND A "JOKER" IN THE 

OPTION WOULD HAVE MADE THE CITY 

ASSUME $1,450,000 IN MORTGAGES. 

There is rei)eated evidence that ReyntJlds unloaded his jjrop- 
erty on the Cit}^ to save his Dreamland Company from bank- 
ruptcy. By Reynolds' own testimony his Dreamland Amuse- 
ment Park was a failure from the start. It never paid the in- 
terest on its bonds. It defaulted on its taxes to the City. It 
defaulted also on its water rates to the City. 

When the purchas_e of the Dreamland property was recfnn- 
mended and put through by the ]\Iitchel-Prendergast committee, 
Reynolds' company was encumbered with $1,450,000 in mort- 
gages. By the terms of the first option accepted by the IVoard 
of Estimate, the City would have paid Reynolds $1,500,000 as the 
maximum and $1,350,000 as the minimum price for the prop- 
erty, and on top of that would have had to assume the Si. 450.000 
in mortgages. 

This '"joker" was discovered by Mayor Gavnor, but nm until 
alter the Board of Estimate, on recommendation of the ^litchel- 
Prendergast committee, had voted the options. 

THE SAME BROOKLYN LAND SPECULATORS WHO 
HAVE PROFITED BY SELLING OTHER REAL 
ESTATE TO THE CITY ARE IN THE DREAM- 
LAND DEAL WITH REYNOLDS. 

Involved with Reynolds in the Dreamland deal are certain 
lirooklyn real estate speculators who have been directly or in- 
directly interested with Reynolds in other land deals costing the 
City excessive prices. Among these men are William M. ( "ireve, 
iM-ank Bailey, Joseph Huber and George E. Dolxson. 

Greve, a friend and business associate of Revnolds. is vice- 



president of the Xeponsit Realty Company, which made a profit 
of more than 2,400 per cent, by the sale of a lar^e part of Rock- 
away Park to the City. He is second vice-president and member 
of the Buying and Selling- Committee of the Realty Associates, 
the company which has assisted Reynolds financially in his City 
land deals. ' 

Bailey is president of the Realty Associates and vice-president 
of the Title Guarantee and Trust Company. It was through the 
Title Guarantee and Trust Company that Reynolds obtained his 
first mortgage, for $750,000, on Dreamland. The same company 
also has shared Avith the Realty Associates in financially backing 
Reynolds in other land transactions with the City. 

Dobson has been a friend and business associate of Reynolds 
for many years. He is president of the Harway Improvement 
Company, which in 191 5 was exposed as attempting to exchange 
twenty-one acres of property for fifty-two acres of City land, all 
near Coney Island. Greve, friend of both Reynolds and Dobson, 
testified he "looked after the Harwav property," and that the 
Realty Associates had taken 100 acres of the Dobson Company's 
land. 

Dobson was a director with Reynolds in Wonderland, the cor- 
poration for which the Dreamland Company was substituted. 
Part of the money to be paid by the City for the Dreamland prop- 
erty is to be used to liquidate a judgment, with interest, againsr 
Dobson, Reynolds and other direcl )rs of Wonderland. 

A SUMMARY OF MAIN FACTS. 

REYNOLDS DID NOT OWN DREAMLAND WHEN HE 

GAVE THE $1,000,000 OPTION IN FORCE TODAY, 

AND ADMITTED MISREPRESENTATION TO THE 

CITY; WHILE THE MITCHEL-PRENDERGAST 

COMMITTEE REJECTED THE OPINION OF 

THE CHIEF ENGINEER OF THE BOARD 

OF ESTIMATE THAT THE OPTION 

SHOULD NOT EXCEED $699,000. 

Among the facts brought to light in this report are the fol- 
lowing : — 

ALTHOUGH THR CITY TOOK ITS FIRST DREAMLAND 
OPTION OX JULY 27, 1911, THE FINAL PRICE TO BE PAID 
HAS NOT YET BEEN DETERMINED, AND MAY NOT BE DE- 
TERMINED UNTIL 1919. 

THH SIX YEARS OF DELAY HAVE C.IN'EN WILLIAM H 
REYNOLDS $360 000 IN INTEREST OVER AND ABOVE THE 
OPTIOX PRICE OF $1,000,000. THE IXTEREST COST IS GROW- 
ING $60 000 A YEAR, OR $1 153.86 EVERY WEEK. 

THE ENTIRE AREA TAKEN BY THE CITY WAS ORIGIN- 
ALLY BOUGHT BY REYNOLDS FOR $457 500; HE TESTIFIED 
THIS WAS AN 'EXORBITANT PRICE" AND THAT THERE 
HAD BEEN NO INCREASE IN VALUE. YET THE CITY'S OP- 
TION. WITH INTEREST. WOULD GIVE REYNOLDS $1,360,000 
P^OR THE PROPERTY. ADDED TO THIS IS $398 000 COLLECT 
ED BY REYNOLDS IN FIRE INSURANCE, MAKING A TOTAL 
OF $1 758 000. 



the $1360 000 which the city would pay reynolds 
Today is for land valued and assessed by the tax 
department at $340,000. 

john purroy mitchel and william a. prender- 
gast controlled the special committee of the 
board of estimate which recommended and facili- 
tated the purchase; and are responsible 'for thk 
dreamland deal. 

the mitchel-prenderg-ast committee got the 
board of estimate to accept no fewer than four 
options from reynolds on dreamland. the fourth 
and last option is the option in force today. rey- 
nolds gave this option, and the mitchel-prender- 
gast committee recommended it, although rety- 
nolds and his dreamland corporation no longer 
oavned the property. 

the mitchel-prenderfast committee put the 
dreamland deal through the board of estimate, 
notwithsanding the fact the city could have re- 
claimed 63 acres of coney island land for $60,000; 
and notwithstanding the fact the city might have 
bought 90 other acres, with income covering all 
carrying charges, including interest. for $25 000 an 
acre. as against the $142,800 an acre called for in 
reynolds' option. 

by unloading his property on the city, reynolds 
saved his dreamland corporation from bank- 
ruptcy reynolds himself testified that his 
dreamland amusement park was a failure from 
the start; that it never paid interest on its 
bonds, owed salaries, and defaulted water rates 
and taxes to the city. 

a "joker" in the first two options recommended 
and put through the board of estimate by the 
mitchel-prendergast committee would have com- 
pelled the city to pay $1 450 000 in mortgages on 
dreamland. mayor gaynor two months later re- 
vealed this "joker " and the third and fourth op- 
tions then followed, these for $1,000,000 on a de- 
creased area and with dreamland lf.ft tc) pay its 
own mortgages. 

the third option named the dreamland corpo- 
ration as the owner of the property. whereas 
the corporation had ceased to be the owner 29 
days before the report of the mitchel-prender- 
gast committee recommending it, and 44 days be- 
fore the board of estimate voted it. 

the fourth option— the option in force today— 
apparently w^as drawn in view of the fact that 
the dreamland corporation no longer was the 
owner. notwithstanding this the mitchel-pren- 
dergast committee reported to the board of es- 
timate for "the acquisition" of the dreamland 
corporation's property; and on this report the 
board voted the option. 

by the terms of the option the city must pay 
reynolds interest on the purchase price for l3i/i 



MONTHS BEFORE IT TOOK TITLE OR OWNED THE PARk- 

THE INTEREST DATI?sG FROM AUGUST 1. i;tn AND THE 
CITY'S TITLE FROM SEPTEMBER 14, 1912. 

BY THE TERMS OF THE OPTION THE CITY RELIEVED 
REYNOLDS OF ALL TAXES AND ASSESSMENTS FROM AU- 
GUST 1, 1911, OR FOR 131/2 MONTHS BEFORE THE CITY 
r>WNED THE PROPERTY. 

WILLIAM H. REYNOLDS, WHEN A W^ITNESS UNDER OATH 
ADMITTED HE HAD REPRESENTED TO CITY OFFICIALS 
THAT HIS DREAMLAND CORPORATION OWNED THE PROP- 
ERTY. WHEN AS A MATTER OF FACT IT DID NOT OWN IT. 
JOSEPH HUBER, REYNOLDS' PARTNER, AND THE NEW AND 
KEAL OWNER ALSO ADMITTED UNDER OATH HE KNEW 
REYNOLDS HAD MISREI'RESENTED HIMSELF AS THE 
OWNER. 

THE MINUTES OF THE BOARD OF ESTIMATE REVEAL 
AVILLIAM H. REYNOLDS MAKING "PROPOSITIONS" IN WRIT- 
ING FOUR MONTHS ^VFTER THE FOURTH OPTION, AS IF HE 
OR HIS DREAMLAND CORPORATION STILL OWNED THE 
PROPERTY. THESE "PROPOSITIONS" WERE FOR THE 
PROP^IT OF HIMSELF OR HIS ASSOCIATES AND WERE AP- 
PROVED BY THE BOARD 

INVOLVED WITH REYNOLDS IN THE DREAMLAND DEAL 
ARE MEMBERS OF THE SAME GROUP OF LAND SPECULA- 
TORS WHO HAVE BEEN INTERESTED WITH HIM IN THE 
SALE OF ROCKAWAY PARK, SOUTH BROOKLYN, OR OTHER 
PROPERTY. AT EXCESSIVE PRICES TO THE CITY. AMONG 
THESE ARE FRANK BAILED WILLIAM M. GREVE JOSEPH 
HUBER AND GEORGE F. DOBSON. 

THE CLOSE ASSOCIATION OF REYNOLDS GREVE BAILEY 
AND OTHERS IN THE BROOKLYN GROUP OF LAND SPECU- 
LAT()RS WHO HAVE BEEN ACTIVE IN SELLING LAND TO 
THE CITY, IS REVEALED BY THE SAME "DUMMIES" BEING 
USED IN THE INCORPORATION OF DIPP'ERENT LAND COM- 

?ANn^":s. 

THE WHOLE DREAMLAND AREA COMPRISING 8.72 ACRES, 
COST REYNOLDS ONLY $61(5 500. THE CITY'S $1 000 000 OP- 
TION IS ON 7 ACRES FRONTING THE OCEAN. THE 1.72 ACRES 
RETAINED BY REYNOLDS FRONTS ON SURF AVENUE AND 
]S VALUED BY THE MITCHEL PRENDERGAST COMMITTEE 
AT $500 000. 

PART OF THE MONEY TO COME FROM THE CITY IS TO 
P.E APPLIED TO PAYMENT. WITH INTEREST, OF A JUDG- 
MENT AGAINST WILLIAM H. REYNOLDS GEORGE F. DOB- 
SON AND OTHERS. MORE OF THE CITY'S MONEY WILL GO 
TO REYNOLDS FOR "PERSONAL SERVICES"; STILL MORE 
WILL BE PAID REYNOLDS ON ACCOUNT OF STOCK AND 
BOND HOLDINGS. TOTALING $1351500 IN DREAMLAND. 

THE MITCHEL - PRENDERGAST COMMITTEE PUT 
THROUGH THE $1000 000 OPTION ALTHOUGH CHIEF EN- 
GINEER LEWIS OF THE BOARD OF ESTIMATE HELD IN A 
REPORT TO THE BOARD THAT THE OPTION SHOULD NOl 
EXCEED $699 000. 

THE MITCHEL-PRENDERGAST COMMITTEE ACTING ON 
REYNOLDS' OPINION ADDED $50 0.0 TO THE OPTION PRICE 
FOR SO-CALLED "BREAKAGE OF PLOTTAGE" WHILH IT- 

S 



SELF WORKED TO REiYXOLDS' PR,OFlT BY LKAVIXG HIM 

THE :most valuable p-art of the property, or that 

FRONTING ON SURF AVENUE. STILL FURTHER DISRE- 
GARDING THE CHIEF ENGINEER'S REPORT. THE COMMIT- 
TEE ADDED $250 000 MORE TO THE OPTION. MAKIN( J A 
ROUND TOTAL OF .|;!00 000 MORE THAN THE FIGURE ()F THE 
CHIEF ENGINEER. 

ON APRIL 12, 1911 REl'NOLDS SWORE THAT ALL THE 
DREAMLAND LAND WITH ALL BUILDINGS AND IMPROVE- 
MENTS THEREON. HAD A TOTAL VALUE OF $750 000; ON 
JULY" 27, 1911, REYNOLDS GOT THE MITCHEL-PRENDERGAST 
COMMITTEE TO RECOMMEND, AND THE BOARD OF ESTI- 
MATE TO ACCEPT, A MAXIMUM OPTION OF $1500 000 AND A 
MINIMUM! OPTION OF SI 350 000 ON THIS SAME LAND THEN 
A FIRE-SWEPT WASTE. 

THE TESTIMONY OF REYNOLDS PLACIXG THE TOTAL 
VALUE OF DREAMLAXD WITH ALL IMPROVEMEXTS, AT 
$750,000 WAS AVAILABLE TO. THE MITCHEL-PRENDERGAST 
COMMITTEE IN THE TAX DEPARTMENT BUT IT NEVER 
WAS MADE KNOWX TO THE BOARD OF ESTIMATE AND 
ONLY' WAS BROUGHT OUT A Y'EAR AFTER THE VOTING OF 
THE FOURTH OPTION WHEN REl'NOLDS HIMSELF WAS A 
WITNESS BEFORE THE COMMISSIONERS ON AWARD. 

THE MITCHEL-PRENDERGAST COMMITTEE BROUGHT 
THE MATTER OF THE DREAMLAND PURCHASE BEFORE 
THE BOARD OF ESTIMATE WITHOUT PRELIMINARY RE- 
PORT. WITHOUT PLACING IT ON THE BOARD'S CALENDAR; 
AND RECOMMENDED THE PURCHASE IN A THREE-PARA- 
GRAPH REPORT, BARE OF DETAILED INFORMATION'. 

COMPTROLLEIR PRENDERGAST HIRED TWO REY'NOLDS 
APPRAISERS— WILLIAM P. RAE AND BY'RON L. KENNELLY 
. —TO ADVISE THE CITY WHAT PRICE TO PAY REl'NOLDS 
FOR DREAMLAND. RAE IS THE MAN WHO ADVISED COMP- 
TROLLER PRENDERGAST TO PAY REl'NOLDS $1.32 A SQUARE 
FOOT FOR THE SOUTH BROOKLYN PROPERTY REYNOLDS 
IS SELLING THE CITY, AND WHICH HE HAD OBTAINe'd AT 
60 CENTS A SQUARE FOOT. . AT THIS SOUTH BROOKLYN 
CONDP^MNATION BOTH RAE AND KENNELLY APPEARED AS 
VOLUNTARY WITNESSES FOR REYNOLDS USING AGAINST 
THE CITY THE APPRAISALS THEY HAD GIVEN COMPTROL- 
LER PRENDERGAST. 

RAE ADMITTED UNDER OATH THAT COMPTROLLER 
PRENDERGAST ARFLANGED FOR HIM TO BE PAID FOR HIS 
DREAMLAND APPRAISAL FOR THE CITY, BY JOSEPH HU- 
BER REYNOLDS' PARTNER, AND THE SECOND LARGEST 
BONDHOLDER IN DREAMLAND. KENNELLY SWORE HE 
COULD NOT REMEMBER WHO PAID HIM FOR HIS DREAM- 
LAND APPRAISAL FOR THE CITY. 

RAE TESTIFIED THAT HE GAVE COMl'TROLLER PREN- 
DERGAST AN APPRAISAL OF $1 350.000 ON DREAMLAND; THE 
Al'PELLATE DIVISION OF THE SUPREME COURT SET ASIDE 
THE FIRST AWARD OF $1.014 602.32 AS "LARGELY' EXCES- 
SIVE." 

RAE ^^'AS REVEALED AS HAVING 013TAINED A LOAN ON 
IVROPERTY NEAR SEACVATE P^ROM THE REALTY ASSO- 
CIATES THE BROOKLYN CORPORATION TH.AT HAS FINAN- 



CIALLY ASSISTED REYNOLDS IX HIS CITY LAND DEALS. 
THE FACT OP THE RAE LOAN WAS SWORN TO BY WILL- 
L\M M. GREVE, OFFICER OF THE REALTY ASSOCIATES, AND 
FRIEND AND BUSINESS ASSOCIATE OF REYNOLDS. 

KENNELLY. THE OTHER REYNOLDS APPRAISER HIRED 
BY COMPTROLLER PRENDERGAST, WAS A WITNESS 
AGAINST THE CITY ON THE PURCHASE OF ROCKAWAY 
PARK FROM WILLIAM M. GREVE AND OTHER FRIENDS AND 
BUSINESS ASSOCIATES OF REYNOLDS. HE TESTIFIED 
ROCKAWAY PARK HAD A VALUE OF $1,862,707 AND THE 
AWARD WAS $1,250,000. HE PLACED A VALUE OF $7 500 AN 
ACRE ON THE PARK, INCLUDING 47 ACRES OBTAINED BY 
GREVE FROM THE STATE AT $200 AN ACRE. 

KENNELLY' S APPRAISAL ON DREAMLAND HAS NOT 
BEEN REVEALED. COMPTROLLER PRENDERGAST PERSIST- 
ING IN REFUSAL TO MAKE KNOWN THE FACTS RELATIVE 
TO HIS EMPLOYMENT OF REYNOLDS' APPRAISERS TO TELL 
THE CITY WHAT TO PAY REYNOLDS OR HIS BUSINESS 
ASSOCIATES FOR LAND. , 

THE OFFICIAL CITY RECORDS SHOW REYNOLDS WAS 
SUCCESSFUL MORE THAN ONCE IN HOODWINKING THE 
BOARD OF ESTIMATE. HE GOT THE BOARD TO TAKE OP- 
TIONS WHICH WOULD HAVE MADE THE CITY ASSUME $1.- 
450,000 IN MORTGAGES; HE GOT THE BOARD TO TAKE AN 
OPTION ON LAND HIS DREAMLAND COMPANY DID NOT 
OWN; HE GOT IT TO AGREE TO PAY THE PARK 
PRICE FOR A 200-FOOT STRIP TO SURF AVENUE WHICH 
THE DREAMLAND COMPANY DID NOT OWN; AND FOR THIS 
ALLEGED PRIVILEGE HE GOT THE CITY TO AGREE TO 
BUILD A STREET OR CURB AND SIDEWALK TO IMPROVE 
THE SURF AVENUE FRONTAGE NOT INCUSED IN THE 
PARK. 

H. C. PYLE THE FIRST "EXPERT" WITNESS FOR REY- 
NOLDS, WAS SHOWN TO HAVE MADE ONLY TWO SALES OlP 
PROPERTY IN CONEY ISLAND, ONE TEN YEARS AND THE 
OTHER TWO YEARS BEFORE HIS TESTIMONY. HE AD- 
MITTED HE DID NOT KNOW THE VALUE OF LOTS ON THE 
OCEAN FRONT MAKING UP THE PARK, BUT PLACED A 
TOTAL VALUE OF $1 426.000 ON THE DREAMLAND PROP- 
ERTY FOR WHICH THE AWARD OF $1,014,602.32 WAS SET 
ASIDE BY THE APPELLATE DIVISION OP THE SUPREME 
COURT AS "LARGELY EXCESSIVE.'' 

WILLIAM M. GREVE, THE FRIEND AND BUSINESS ASSO- 
CIATE OV REYNOLDS. WHO NEGOTIATED THE SALE OF 
ROCKAWAY PARK TO THE CITY, TESTIFIED FOR REYNOLDS 
ON DREAMLAND. HE ADMITTED THAT HE HELD DREAM- 
LAND BONDS THAT HE HELD STOCK IN THE LONG BEACH 
ESTATES, OF WHICH REYNOLDS IS PRESIDENT; THAT HE 
HAD BEEN CONNECTED FOR TWELVE YEARS WITH THE 
REALTY ASSOCIATES, THE BROOKLYN CORPORATION OP 
WHICH FRANK BAILEY IS PRESIDENT, AND WHICH HAS 
FINANCIALLY ASSISTED REYNOLDS IN HIS LAND DEALS 
WITH THE CITY. GREVE SWORE TO A VALUE OF $1,252, 90S 
FOR DREAMLAND, AS AGAINST THE $1 014.602.32 AWARD SET 
ASIDE BY THE APPELLATE DIVISION OF THE SUPREME 
.COURT. 

GREVE, WHEN A REYNOLDS WITNESS, ADMITTED THAT 

10 



A "DUMMY" FOR HIMSELF OR A COMPANY OF WHICH HE 
WAS PART OWNER. HAD A CLAIM FOR DAMAGE GROWING 
OUT OF THE DREAMLAND PROCEEDING. 

THE FIRST COMMISSIONERS OF AWARD FILED THEIR 
OATHS OF OFFICE ON MARCH 14, 1912, AND MADE THEIR 
AWARD ON APRIL 5, 1915. SO THAT THEIR DECISION CAME 
AFTER THREE YEARS OF DELAYS ONLY TO BE SET ASIDE 
BY THE SUPREME COURT. THE SECOND COMMISSIONERS 
OF AWARD FILED THEIR OATHS OP OFFICE ON MAY 15, 
1916 AND HAVE NOT YET FINISHED HEARING THE WIT- 
NESSES FOR REYNOLDS. NOR HAVE THEY YET HEARD A 
SINGLE WITNESS BFOR THE CITY. 

THE CLOSE ASSOCIATION OF THE BROOKLYN 

LAND SPECULATORS PROFITING BY CITY 

DEALS, IS SHOWN BY THE USE OF THE 

SAME "DUMMIES" FOR INCORPORATION 

OF DIFFERENT COMPANIES. 

A detailed account of the Dreamland deal, all drawn from offi- 
cial records, follows herewith : 

On August 18, 1903, a company named Wonderland was in- 
corporated for the purpose of operatviig an amusement park 
at Coney Island. The incorporators were William H. Reyn- 
olds, Percy B. Purdy, John H. Whyte, William C. Groves and 
George E. Hall. After the incorporation Reynolds, Purdy, 
George F. Dobson, Eugene D. Wood and Samuel vS. White- 
house became directors. 

The close association of Reynolds, Dobson, Frank Bailey, 
Clifford S. Kelsey and William M. Greve is pointedly shown 
by the appearance of the "dummies" John H. Whyte and Wil- 
liam G. Groves among the incorporators of Wonderland. The 
same Whyte and Groves were used as "dummies" in the incor- 
poration, on July 15, 1914, of the Exeter Corporation. Later 
these "dummies" were replaced by Bailey, Kelsey and Greve. 
Then with Bailey. Kelsey and Greve on the Board of Directors, 
Reynolds transferred to this Exeter Corporation certain South 
Brooklyn property, located where he is selling land both to the 
City and to the State. 

Reynolds testified that it was decided to substitute Dream- 
land for Wonderland, as a better advertising name. Dreamland 
was incorporated on March 3. 1904. The names on the incor- 
poration papers were Tohn H. Whyte. William G. Groves, 
Henry J. Worcester. Walter C. Edwards. George W. Johnson 
alnd John Finley. After the incorporation these "dummies" 
were replaced as directors by Reynolds, Dobson, Joseph Huber 
and S. S. Whitehouse, attorney for, Reynolds. 

FROM A STATE OF IMPENDING BANKRUPTCY 

REYNOLDS' DREAMLAND COMPANY TODAY 

STANDS TO REALIZE A GRAND TOTAL 

OF $2,258,000. 

On March 12, 1904, Wonderland completed purchases giving 
it 8J2 acres of Coney Island, between Surf Avenue and the 

11 



ocean. The tutal i)rice paid for this pr()i)ert}' was ^(5^:i,.■)ll(). The 
buildings on the ])ro])erty were valued at •$.>-). 000, so that the 
price of the naked land was $()lT,.-)00. It is 7 acres of this 
l)ro])erty which the city is taking for pa.rk purposes. 

The remaining l.^<! acres front on Surf Avenue. The three 
expert witnesses for the City valued it at four times the value 
of the ocean frontage taken for the ])ark. The jMitchel-Tren- 
derg-ast committee has placed a value of $500,000 on this 1.T2 
acres. On this basis the following- table shows the total the 
Re_\'nolds corporation, which was practically bankrupt before 
the Dreamland fire, would realize if the Cit}''s option were for- 
mally appro^'ed toda\- : 

City's oi)tion on ; acres $1 ,000,000 

Six years' interest jiayable b\- city ;ir)0,0()0 

Fire insurance ;)!)S,000 

A'alue of l.l'-i acres not incduded in ]>ark.. .")00,000 

$2.-^->s.ooo 

AA'onderland \vas inct^rporated for .Sl.":00.000 and Dreamland 
for $1,500,000. On March 12. 1904. Wonderland, having com- 
pleted its land ])urchases. transferred all its proi)ertv to Dream- 
land. On the same day Dreamland took out a mortgage for 
8750,000. 'idle luortgage was in favor of the Title Guarantee and 
Trust Com])any. and was to secure pa}-ment of $750,000 in gold 
l)onds. 

Dreamland issued $l.r)00,000 in common stock. Half of this 
amount, or •ST-'iO.ooO, was retained by Reynolds for ])romoting- 
the company, ddie other half was allotted to ])urJiasers of 
the gold l)onds: one share of the common stock being g-iven 
free with each g'-old bond. Reyr*olds testified the bonds were 
sold at par. 

DREAMLAND WAS A FINANCIAL FAILURE FROM 
THE START, CONTINUING TO ACCUMULATE 
DEBTS FOR SEVEN YEARS, UNABLE TO PAY 
JUDGMENTS AND SALARIES, AND DE- 
FAULTING ON TAXES AND WATER 
RATES TO THE CITY. 

Reynolds also testified that he was the largest bondholder 
in Dreamland, and that he held S;>00,::)0 of the l)onds. The 
common stock that went free with these bonds, added to the 
.ST50.000 in stock for ])romoting the company, bring:', the total 
of the common stock owned bv Revnolds to $1,050,750. IX 
STOCKS AX I) I'.OXDS REYNOLDS, ACCORDING TO 
HIS TESTI.MoX^■. HAS A GRAXD TOTAL IXTRRKST 
IN DREAM I. AX I) ol' $l,:5r)l,oOO. 

Dreandand ne\ er was i)rofitable: I'd-om Reynolds' own tes- 
timony it api)ears that from the day it was first o])ene(l to 
the i)ublic in liMil nntil it was destroyed by fire c>n Mav 27, 
Uni, it continued to accunudate debts. 

W hen a witness before the Comnnssioncrs on Award, l\e\-n- 

: 12 



olds testified that at the time of the fire there were six mort- 
gages on Dreamland, amounting; to i?l,4.")U,000. This total 
\Aa"s made u]) of separate mortgages for .$3.j,000. $05,000, 
SiOO,(>00. $-20(),000, .$;500,(>()() and $750,000. 

These mortgages did not complete the liabilities of the 
e-irporation. Taxes and water rents were and still are owing 
the City. Judgments remained un])ai(l. Reynolds testified 
that salaries had not been paid. 

In a report to the Statej Comptroller for the year ending 
October iU, lOll, Reynolds stated Dreamland had a total of 
average liability of $1.;]()0,500 : and appraised the $1,500,000 
iTi common stock at Si 5.0(10, or >>1 a share. 

In this same State rei)ort. recpiired l)y law, Reynolds gave 
the gross value of Dreamland's real estate at $800,000. Yet 
in the same year for which this report was made, or on July 
27. 1911, Reynolds succeeded in having the Board of Esti- 
mate take two options on the proi)erty. one for $1,350,000 at 
private sale, the other for $1,500,000 at condemnation. 

At the time of the fire Dreamland carried insurance of 
$;;!t8.000. U]) to October 11, 1912. $;l85,;5!i8. n of this insur- 
ance had been paid, and claims then Avere jicnding for the 
unpaid balance of SI 2.(;o 1.5:5. 

THREE MONTHS BEFORE THE CITY TOOK ITS 
FIRST OPTION FOR $1,500,000 ON ALL THE 
DREAMLAND LAND REYNOLDS PETI- 
TIONED THE TAX COMMISSIONERS 
TO ASSESS IT AT $550,000 

In 1011 it was proposed to increase the assessed valuation 
of all of the Dreamland property from $720,000 to $1)76,500, 
ui\'ided as follows : 

VALUE OF VALUE OF BUILD- 
REAL ESTATE INGS. ETC., OR OF- TOTAL AS- 
UXIMPROVED. LMPROVEMEXTS. SESSED VALUE. 
$729,500 $217,000 $976,500 

Reynolds protested this increase and filed a formal petition re- 
questing a decrease to $750,000 with the Tax Department. The 
petition held the Dreamland land to be worth only $550,000, while 
the improvements thereon were valued at $200,000. 

'T PAID AN EXORBITANT PRICE," TESTIFIED REYN- 
OLDS, AND A FEW WEEKS LATER GOT THE 
CITY TO TAKE AN OPTION AT $882,500 
OVER AND ABOVE THAT "EXOR- 
BITANT PRICE." 

Following the filing of the petition, Reynolds a[)peared as 
u witness before the Tax Board on April! 1. 1911. His tes- 
timony was given six weeks before Dreamland burned down 
.nrl only three months before the City took its first option. 
Reynolds protested the proposed increased valuation under 

13 



oath, and was heard by Lawson Purdy, President of the Tax 
Board, and Judson G. Wall and Edward Kaufmann, Com- 
missioners. 

The following testimony was given by Reynolds : 

"By Mr. Reynolds : 'The assessed valuation has been in- 
creased by a little over $300,000. I bought an interest in 
the McKeon estate, $447,000 at auction seven years ago. I 
paid $200,000 down. AND I WILL SAY I PAID AN EX- 
ORBITANT PRICE. I first purchased the Surf Avenue 
frontage; thev sold it in two sections, and I Wx^S COM- 
PELLED TO BUY THE OCEAN FRONT AT DOUBLE 
THE PRICE. 

"SINCE DREAMLAND WAS INCORPORATED 
.NOT ONE DOLLAR HAS BEEN PAID TO THE IN- 
VESTORS AND NOT ONE DOLLAR OF THE $150,000 
HAS BEEN PAID TO THE TITLE GUARANTEE AND 
TRUST COiMPANY. THE WILLIAMSBURG SAV- 
INGS BANK HAS $300,000 FIRST MORTGAGE ON 
DREAMLAND, AND IN SEVEN YEARS WE HAVE 
NEVER PAID ONE DOLLAR OF INTEREST. NO 
MAN HAS RECEIVED ONE CENT IN RETURN. AND 
IT HAS BEEN A LOSING VENTURE FROM THE 
START. I think, gentlemen, the main point I raise is that 
DREAMLAND HAS NOT INCREASED TO ANY 
SUCH EXTENT SINCE I PURCHASED IT SEVEN 
YEARS AGO. IT HAS NOT PAID ONE DOLLAR ON 
THE INVESTMENT. I ONLY PUT IT UP TO YOU, 
GENTLEMEN, THAT IN THE WHOLE SEVEN 
YEARS THAT WE HAVE RUN IT. WE HAVE NOT 
MADE A DOLLAR OUT OF IT. We helped to increase 
the value of everything down there at Dreamland. BUT 
WE NEVER GOT THE VALUE OF A DOLLAR. 

Q. What do you figure the market value? 

A. It was full last year. 

Q. YOU HAVE NOT PAID YOUR TAXES? 

A. NO. WE HAVE PAID NO SALARIES AND WE 
HAVE NOT BEEN GETTING ONE DOLLAR. 

By Reynolds' formal petition and testimony, the total value of 
all Dreamland, both real property and buildings, on April ir, 
191 1, was $750,000. On July 27, the same year. Dreamland was 
a fire-swept waste, subsequently costing the City $25,000 for re- 
moval of wreckage; yet on this date the Mitchel-Prendergast 
committee recommended, and the Board of Estimate voted, two 
options for the purchase of the Dreamland real estate — one option 
for $1,500,000 and the other for $1,350,000. 

And it is on the least valuable part of the Dreamland site that 
the City today holds, on recommendation of the Mitchel-Prender- 
gast committee, an option of $1,000,000, involving up to the 
present $360,000 in interest. 



14 



DREAMLAND WAS IN SUCH A FINANCIAL PLIGHT 

IT HAD BEEN SOLD BY THE SHERIFF FOR 

NON-PAYMENT OF DEBTS. 

When the City first took action to acquire the property, there 
was no talk from Reynolds of Dreamland as a losing proposition. 
But the financial plight of Dreamland then and for several years 
before was so serious that its property had been sold at Sheriff's 
sale for non-payment of debts. 

On December 22, 1909, Eugene D. \\'ood got a judgment 
aiiainst Dreamland for $205,680. On the same date Joseph Huber 
got another judgment for $131,850. As a result of these judg- 
ments, Patrick T. Quinn. Sheriff of Kings County, on September 
26. 1910, sold the site of Dreamland at public auction. The site 
was bought by Wood and Huber for $80,000. On August 29. 
191 1, one month after the City had taken the first two options. 
Wood assigned his interest to Huber. On September 5, 191 1, 
a Sheriff's deed turned over the property to Huber. 

Under this deed Huber held title to the Dreamland site, in- 
cluding that part taken bv the Citv for the park. 

THE FACT THAT DREAMLAND HAD BEEN SOLD 
AT SHERIFF'S SALE WAS KEPT A SECRET BY REYN- 
OLDS WHEN NEGOTIATING THE FIRST TW^O OP- 
TIONS WITH THE CITY. 

The third option, for $1,000,000 on a part of Dreamland, was 
recommended by the Mitchel-Prendergast committee and adopted 
bv the Board of Estimate on October 19,1911. The fourth option, 
also for $1,000,000, was similarly accepted by the City on Jan- 
uary 12, 19T2. 

REYNOLDS GAVE BOTH THE THIRD AND FOURTH 

OPTIONS ON THE PRETENSE HIS DREAMLAND 

COMPANY STILL OWNED PROPERTY IT 

HAD LOST WEEKS BEFORE. 

Both of these options were given by Reynolds on the pretense 
his Dreamland Corporation owned the property. But the corpo- 
ration had ceased to be the owner on September 5, 191 1. SO 
THAT REYNOLDS GAVE THE CITY AN OPTION ON 
PROPERTY HE OR HIS CORPORATION DID NOT OWN. 
The Dreamland fire broke out about 3 a. m. on May 2"], 191 1. 
While the firemen still were throwing water on the ruins Reyn- 
olds began a campaign to unload the site on the City for a public 
park. In a Manhattan morning new^spaper of May 28, 191 1, 
Reynolds was quoted as follows: 

"I believe the best thing that could be done with the 
property would be its purchase by the City for a park. 
THE OLD ARGUMENT OF EXCESSIVE COST NO 
LONGER HOLDS. No buildings remain to be condemned. 
Only the cost of the land need be considered. If the Citv 
was a private institution, I will wager that no time would 
be lost in grasping this great opportunity." 

15 



IN THREE MONTHS REYNOLDS' ' VALUATION 
JUMPED FROM $550,000 TO $1,500,000, AND THE 
MITCHEL-PRENDERGAST COMMITTEE AC- 
CEPTED THE LATTER FIGURE. 

The "great opportunity"' seen by Reynolds existed only for 
his Dreamland Company. Sale of the property to the City of- 
fered the one chance of escape from financial collapse. Operating 
its amusement park at a growing and continuous loss, unable to 
pay its salaries and its taxes, unable e\en to pay the interest on 
its bonds, with all its properly reduced to a fire-swept w^aste, the 
Reynolds company's financial hope lay in getting the City to buy 
its land. r>y Reynolds' own testimony on Aprill ii, 191 1, all of 
this land, with all buildings and improvements thereon, had a 
total value of $750,000. The land, alone he valued at $550,000. 
But selling this same land when a fire-swept waste to the City 
only three months later, Revnolds insisted on a cash option of 
$1,350,000 or $1,500,000 if taken by condemnation. 

And these options were approved l)v the Mitchel-Prenderga.-^t 
committee, recommended by it to the Board of Estimate, and so 
adopted Ijy the Board. 

WHILE THE OPTIONS WERE BEIXG NEGOTIATED 
THE TESTIMONY OF REYNOLDS \\\LUING DREAM- 
LAND, WTTH ALL ITS BETILDINGS AT $750,000, WAS 
AVAILABLE IN THE TAX DEPARTMENT. 

If the ]^Iitchel-Prendergast committee had knowledge of this 
testimony, that fact was not made known In' it to the Board oi 
Estimate. If the committee was without knowledge of the testi- 
mony, then it failed to olnain a\'ailal:)le City records on one of 
the first points of information required in all land i)urchases by 
the City. 

THE MITCHEL-PRENDERGAST COMMITTEE 

EITHER NEGLECTED ITS DUTY OR WITHHELD 

REYNOLDS' TESTIMONY FROM THE 

BOARD OF ESTIMATE. 

A\"ith the Reynolds testimony jjefore it, the Board of Estimate 
apparentlv would have been compelled to reiect the options. THE 
OFFICIAL RECORD MAKES CLEAR THAT THE 
MITCHEL-PRENDERGAST COMMITTEE EITHER NEG- 
LECTED ITS DUTY (m WTLFULLY WITHHELD REY- 
NOLD'S TESTIMONY FROM THE BOARD. 

The Dreamland purchase first came before the Board of Esti- 
mate on June 15, 191 1, in the form of a resolution from the 
Board of Aldermen favoring the i)urchase. This resolution had 
been adopted Iiy the Aldermen on June 6. \[)\ 1. 

The Board of Estimate referred the matter to a special com- 
mittee. John Purroy Mitchel, president of the I'oard of Alder- 
men ; William A. IVendergast, Comptroller, and Alfred E. Steers, 
President of the Itorough of r.rooklyn. were named as the three 
members of this committee. 

'I'he Mitchel-Prendergast committee n]ade no i)reliminarv re- 



l^ort. Instead ii made a first and tinal report, on July 27, 191 1, 
Hatly recommending- the piirchai;e. Xo reference was made to 
City-owned property at Coney Island, which might he reclaimed 
or developed for park purposes. Xor was any reference made 
to other property which might have l)ccn acquired at lower cost 
than Dreamland. 

The Board of Estimate ]jrints a calendar of husiness for its 
meetings. The report of the Mitchel-Prendergast committee fa- 
voring the Dreamland purchase, and recommending options, was 
not on the calendar. To the contrar)-, the of^cial minutes re\"eal 
thai the matter was hrouglu U]) without notice. 

IHE MITCHEL-PRENDERGAST COMMITTEE 
RECOMMENDED THE $1,500,000 PURCHASE 
FROM REYNOLDS IN THREE SKEL- 
ETON PARAGRAPHS. 

The committee's report was dated Jul}- ly, 1911, the same day 
it was submitted to the Board. It consisted merely of three 
skeleton paragraphs, bare of all details on a plan involving an 
outlay by the City of several million dollars. 

Nothing! appears in the minutes of the Board in exjilanation of 
the fact that one option was for $1,350,000 and the other for 
$1,500,000 on the same and identical piece of property. A closing 
recommendation that "condemnation proceeding-s be instituted." 
however, made it clear that the Mitchel-Piendergast committee 
purposed to i)ay the $1,;; 00,000 rather than the $1,, ^0,000. 

That the Mitchel-Prendergast committee w^as determined to 
do all in its power to pay Reynolds the $1,500,000 is further 
shown by the fact that a resolution providing for condemnation 
proceedings was presented bv Comptroller Prendergast to the 
Board. 

This resolution was adopted unanimously ])y the lUjard. Reso- 
lutions for the two options, a resolution for the preparation for a 
map laying out the ]iark, and a resolution for a ]:)ublic hearing as 
reciuired by law, all were ])resented by the Comptroller and all 
were voted unaniuiously. 

No mention was made in. the Mitchel-Prendergast report, nor 
does any mention whatever ap])car in the board's minutes of this 
meeting, of the mortgages totalling $1,450,000 on Dreamland. 
NOR WAS IT REVEALED TPIAT BY THE TERMS Ol- 
THE MITCHEL-PRENDERGAST OPTION THE CLIA' 
NOT ONLY WOULD HAA E H.\D TO PAY REYNOLDS 
$1,500,000, PLUS INTEREST, BUT ALSO PAY THE $1.- 
450,000 IN MORTGAGES. 

NOT ONE BUT TWO REYNOLDS APPRAISERS WERE 

HIRED BY COMPTROLLER PRENDERGAST TO 

ADVISE THE CITY WHAT TO PAY FOR 

DREAMLAND. 

There is sworn evidence to the effect that either before or 
after the first options on Dreamland, Comptroller Prendergast 
hired two Reynolds' ai)in-aisers to advise what the City should 

17 



pay Reynolds. These appraisers were William P. Rae and Bryan 
L. Kennelly. Rae testified that the date of his report to Comp- 
troller Prendergast was April 20, 1912. If this date is correct 
the value of his report was nil, for the reason that the last of 
the four options on Dreamland had been voted by the Board of 
Estimate on January 12, 191 2, or exactly three months before. 
The testimony of Rae was brought out at hearings in condem- 
nation proceedings by the city for the acquirement of land for a 
freight classification yard in connection with the South Brooklyn 
Marginal Railroad. Kennelly also was questioned regarding 
Dreamland at the same proceeding, both witnesses being heard 
shortly before the closing of testimony in May, 1916. 

It was them revealed that both Rae and Kennelly are apprais- 
ers for Reynolds or his Brooklyn associates in land deals with 
the city. Furthermore, it was revealed that Rae had been paid 
by Joseph Huber for telling Comptroller Prendergast what the 
city should pay Reynolds for Dreamland. Rae admitted that 
this plan of payment was arranged between the Comptroller and 
Huber. As shown by testimony, Pluber w'as the second largest 
bondholder in Dreamland. 

RAE'S TESTIMONY SHOWS HE WAS PAID FOR HIS 

DREAMLAND APPRAISAL FOR COMPTROLLER 

PRENDERGAST BY HUBER, REYNOLDS' 

PARTNER. 

The testimony given by Rae in this connection follows here- 
with : 

Q. Mr. Rae, you testified that you made numerous ap- 
praisals for the Comptroller. Is that correct? 
A. Yes. 

Q. Did you appraise for the Comptroller that part of the 
property belonging to the Dreamland Corporation, or to 
Joseph Huber, as trustee, which was acquired by the City 
of New York in a proceeding known as Public Park at Coney 
Island? 
A. I did. 

Q. Was that appraisal made about the year 191 1 or in 
the year 1910? 

A. My report is dated April 20, 191 2, to the Comptroller. 
Q. Was not your appraisal of that property approxi- 
mately $1,250,000? 

A. Somewhat above $1,250,000. It was $1,350,000. 
Q. DID THE COMPTROLLER PAY VoU FOR 
MAKING THAT APPRAISAL OR THE PROPERTY 
OWNERS ? 

A. HE ARRANGED FOR THE PAYMENT BY THE 
PROPERTY OWNER, MR. HUBER. 
Kennelly followed Rae on the stand, and was asked who paid 
him for his appraisal of Dreamland. 

*T don't remember who paid me," he replied. 

Rae appraised Dreamland for the Comptroller at $1,350,000; 

18 



Reynolds lias testified that his purchase price of $617,500 was 
exorbitant, and the AppeHate Division of the Supreme Court 
has set aside an award of $1,014,602.32 as "largely excessive." 

VOLUNTEERING AS A WITNESS AGAINST THE 
CITY, RAE USED IN REYNOLDS' BEHALF AN 
APPRAISAL HE HAD GIVEN COMP- 
TROLLER PRENDERGAST. 

Rae appeared as a voluntary witness for Reynolds in the South 
Brooklyn condemnation proceeding. He used in Reynolds' in- 
terest the same appraisal he had made for the Comptroller. He 
did this although it was pointed out to him that he was not re- 
quired to testify, unless he did so voluntarily. He swore in 
Reynolds' behalf to having given the Comptroller a valuation of 
$1.32 a square foot on the South Brooklyn property, which liad 
been obtained by Reynolds for 60 cents a square foot. And fol- 
lowing Rae's appraisal the City, on recommendation of the 
?^Iitchel-Prendergast Committee, took an option of $1.30 a square 
foot. 

Kennelly also testified for Reynolds in the South Brooklyn 
proceeding. He, too, used against the City the appraisal he had 
made for Comptroller Prendergast. and was a voluntary witness 
for Reynolds. It was this same Kennelly who testified against 
the City in the purchase of Rockaway Park, in which proceed- 
ing Reynolds himself was a witness against the City. 

COMPTROLLER PRENDERGAST HAS PERSISTED IN 
REFUSING TO MAKE PUBLIC THE FULL FACTS 
OF HIS EMPLOYMENT OF REYNOLDS AP- 
PRAISERS TO ADVISE THE CITY 
WHAT TO PAY REYNOLDS. 

The full facts of the employment by the Comptroller of ap- 
praisers for Reynolds to tell the City what to pay Reynolds 
or his associates for land have not yet been revealed. Comp- 
troller Prendergast himself has persisted in refusing to give 
information on this point. Plainly the facts in this connec- 
tion are of public importance. But it appears they can only 
be brought to light by compulsion, or by means of an official 
investigation. 

The fact that the first two options contained a "joker" bv 
which the City would have had to pay the mortgages o'f 
$1,450,000 on the property was revealed by Mayor Gaynor 
on August 28, 1911. This was two months 'after the options 
had been voted by the Board of Estimate. This revelation 
was made in a communication from Mayor Gaynor to the 
Cities Committee of the Legislature, then considering a new- 
City Charter. 

HOW MAYOR GAYNOR REVEALED THE "JOKER " 

MAKING THE CITY RESPONSIBLE FOR THE 

$1,450,000 MORTGAGE ON DREAMLAND. 

Mayor Gaynor's statement follows: 

19 



"At the last meetini;- of the IJoard of Estimate and 
Apportionment a resohition was passed to purchase land 
at (!oney Island of the i Dreamland Corporation. The 
price mentioned was $1,500,000, and every member of 
the Board, I am {|uite sure, supposed that the corpora- 
tion undertook in the option to convey an imencnm- 
bered and clear title for that sum. 

"IjUt mv attention has since ])ecn called to the fact 

that the option of that Corporation is not tliat it will 

convey a clear title, l)ut only thai it will convey (these 

arc the verv w^ords) its 'right, title and interest in and 

to' the propertv. UPON EXAIMINATION I FIND 

THE PROPERTY TO BE ENCUMBERED BY 

?\10RTGAGES AMOUNTING TO $1,400,000. If the 

IMayor had a suspensixe veto power he could sus])cnd 

that resolution until the Board considered it a.iii'ain."' 

By Reynolds' testimony, the mortgages on the ])ropert>' 

totalled $1,450,00(1, or $5()',(»00 more than the figure stated l)y 

Alayor Gaynor. 

Following Mayor Gaynor's letter two suljstitute oi:)tions 
were taken on Dreamland. Each of these iu"ovi;ied for the 
Ciry to get the pro])erty at the 0|)tion price free of encum- 
brance. 

NO EXPLANATION OF THE $1,450,000 "JOKER" IS 
FOUND IN THE BOARD OF ESTIMATE MINUTES. 

Xo explanation of the omission of this ])rotecting clause 
from the first two o])tions appears in the minutes of the 
Hoard of Estimate. Yet this omission would have cost the 
city $1,450,000 over and above the purchase price. 

On August 31, 1911. Nelson P. Lewis submitted a report 
on Dreamland to the lioard of Estimate. Lewis was Chief 
luigineer to the Board, a position he still holds. A\'ith his 
re].iort was presented a map of the proposed ])ark. 

He stated that the full area of the Dreamland pro])erty was 
S.v2 acres, with a total assessment of $729,500. He reported 
that seven 'acres were being taken for the park, and that the 
toted Dreamland assessment was divided as follov/s : 

AREA TOTAL ASSESSED 
IN ACRES. A'ALUATION. 

Dreandand property 

taken by city. ' 7.0 v$;3 10.000 

Dreamland property not 

taken bv cit\- ' El 3 390,000 



$730,000 

It w;is set forth in the Lewis report that the map he ]>re- 
sented had been prepared by the Chief Engineer of the l^opo- 
graphical Bureau of the P.orough of Brooklyn, from certain 
records Avith which he was familiar, and other reoortls in his 
office. Tins map conformed to the report made by the 

20 



Mitchel-Prendcrgast Ct^nimittec on July 2], ]1)1L and nut 
to the options voted, on that date by the Board of Estutiatc. 
(")n this point Eng:incer Lewis stated that the park to be laid 
out and as shown on the map. "DOES NOi. INCLUDE 
THE L\XD EXTEXDIXu EROAl SURF A\'EXU'E 20<) 
FEET SOUTHI< RLY. AXD DOES NOT, THEREFORE. 
COVER ALL Till- LAXD XAAIED IN THE OPTION.- 

CHIEF ENGINEER LEWIS REVEALED FACTS PROV- 
ING THE EXCESSIVE PRICE THE MITCHEL- 
PRENDERGAST OPTION WOULD GIVE 
REYNOLDS. 

Xo explanation as to wh>- this official City ma]) did not 
include all the ])roi)erty then was made to the Board of Esti- 
mate. But the map was approved, and thereafter the price, 
in the third and fourth options, was hxed at the ci])parently 
decreased price of $1,000,000. F]ut this sum exceeded the 
assessed value of the smaller area taken by $6(50,000 ; while 
Reynolds was left in possession of property four times more 
valuable than the City's part. 

It was pointed out by Lewis that the first oi)tiun ])rice of 
•■<L--)00.()nO for all the Dreamland i)roi)erty excee(led the 
assessed valuation by 20~>J) per cent. : and he held that the 
<:;ption on the decreased area, or the area which at present is 
being- ])urchased, should be reduced to $(iO!),000. His report 
ended with the following- statement : 

"I do not know whether the Dreandand Com])any is 
prepared to accept the proportion of the sum (^(iOO.OOO) 
named in the (p])tion which the assessed value r>f the part 
to be taken bears to that of their entire holdings. I am 
simply presenting the ma]) which the r)Oard instructed 
me to prepare and have endeavore(l to give as closely as 
]50ssible the assessed value of the land to be acc|uired in 
order to com])ly witli the jjrcn-isions of the Charter." 

THE CITY COULD HAVE HAD 90 ACRES, WITH IN- 
COME COVERING CARRYING CHARGES, FOR 
$2,250,000, AS AGAINST THE OPTION PRICE 
OF $1,000,000 FOR REYNOLDS' 7 ACRES. 

The same day ihe Lewis re])(irt was submitted, an olier 
was made i'n writing of !)() acres for a i)ark on the Coney 
Isl.and water front for $2,2.")0,OOO. A bathing house with 
accommodations for 3,000 ])ersons : two hotels, sexeral stores. 
an ocean boardwalk, and the steel grandstand of the lirighton 
Beach race track, were included in the offer. 

The oher was made with the stateiuent that the income 
from the hotels, stores, bathing houses and privileges was 
sufficient to cover all the carrying charg-es of the i)roperty, 
ilicluding the interest on the i)ro])ose<l ])urchase ])rice of 
$2,250,000. 

This offer was from the llrighlon I'each Racing Associa- 
tion and was for the sale of DO acres making u]) the Brighton 

21 



Beach frontage. The advantages to the public of this offer 
are easily apparent. Ninety acres were offered for $3,250,000 ; 
while on 8.73 acres of the Dreamland property the City had 
one option of $1,350,000, and another of $1,500,000 In' addi- 
tion, Dreamland was a fire-swept waste, while at Brighton 
Beach were improvements giving an income covering all car- 
rying charges and interest on the purchase price. Further- 
more, it was open to the City at small cost to increase the 
accommodations of the bathing house to 8,000 persons. 

On motion of George McAneny, then President of the Borough 
of Manhattan, the question of the Dreamland purchase and the 
offer of the Brighton Beach acreage, were referred back to the 
Mitchel-Prendergast committee for a special report. 

ANOTHER OPPORTUNITY WAS OFFERED THE CITY 
TO RECLAIM 63 SEASIDE ACRES FOR $60,000. 

On October 5, 191 1, it was made known to the Board of Esti- 
mate that the City already had 6^, acres of land available for a 
park at Coney Island, and that this ocean front could be re- 
claimed and opened to the public for $60,000, as against the 
$1,000,000 named in the final option for Reynolds' seven acres. 

This revelation was made in a communication from Cyrus C 
Miller, President of the Borough of The Bronx. Miller was the 
one member of the Board of Estimate who opposed the Dreatn- 
land options. He was not present when the first two options 
came before the Board ; the affirmative vote of The Bronx then 
being cast by Thomas W. Whittle, as Acting President. Whittle 
now is Park Commissioner of The Bronx, by appointment from 
Mayor Mitchel. 

President Miller informed the Board that the City had acquired 
63 acres at the foot of Ocean Parkway in 1874; that part of this 
tract had been washed away, but that its reclamation was possible 
at a cost of $2,000 an acre. It was his opinion that the City ought 
not to pay $3,000,000 to $4,000,000 to Reynolds and others when 
it already had 63 acres which might be reclaimed and opened as 
a park at $60,000. 

PRESIDENT MILLER FOUND IT DIFFICULT TO SEE 
A REASON FOR THE DREAMLAND PURCHASE. 

The Miller communication, throwing an interesting light on the 
whole Dreamland proposition, favored the opening of a sea 
beach for the public at Coney Island, but added : 

'TT IS DIFFICULT TO SEE WHAT REASON THERE 
IS FOR A PURCHASE BY THE CITY OF SUCH A TRACT 
AS DREAMLAND, WHICH DOES NOT AMOUNT TO 
MORE THAN EIGFIT (8) ACRES, AND WHICH WILL 
COST, WITH THE NECESSARY LAND TO BE TAKEN 
ADJOINING IT, BETWEEN $3,000,000 AND $4,000,000. 
WHEN THE CITY ALREADY HAS SIXTY-THREE (63) 
ACRES WHICH MAY BE RECLAIMED AT A COST NOT 
EXCEEDING $60,000." 

On October 19, 191 1, the Mitchel-Prendergast committee nnde 



the special report to the Board on the Dreamland purchase, the 
offer of the Brighton Beach Racing Association, and the Miller 
plan for the 63-acre park at a cost of $60,000. 

The report was signed by the three committee members, John 
Piirroy Mitchel, William A. Prendergast and Alfred E. Steers. 

The report referred to the two options of July 27, 191 1, as 
having been drawn to include all the Dreamland property, and 
recommended a new option for $1,000,000, exchiding a 200-foot 
tract along Surf Avenue. 

No mention was made of the earlier discovery by Mayor Gay- 
uor of the "joker" in the first options which would have forced 
the City to pay the $1,450,000 in Dreamland mortgages. This 
fact was then and thereafter passed over in silence by the 
Mitchel-Prendergast committee in its reports, and the third and 
fourth options, each for $1,000,000 on a decreased area, put 
through the Board. 

THE MITCHEL-PRENDERGAST COMMITTEE 

CONCEDED THE VASTLY GREATER VALUE 

OF THE DREAMLAND LAND LEFT IN 

REYNOLDS' POSSESSION. 

]n its special re])ort the committee dwelt on the vastly greater 
value of the tract left in Reynolds" hands. On this point the 
following statement was made : 

"According to figures based on the sale of the Martin 
Rauscher property, directly opposite the Dreamland prop- 
erty, the value of the 200-foot strip of Dreamland property 
not to be taken is. approximately, $500,000." 
Engineer Lewis' report to the Board that the option for the 
decreased area should be $699,000 was rejected by the committee, 
and the price put at $1,000,000. This suiu allowed a $50,000 
claim of Revnolds for so-called "breakas;e of plottage." THP'. 
COMMITTEE'S OPTION EXCEEDED THE LEWIS 
FIGURE BY $301,000 AND THE ASSESSED VALUE BY 
$660,000, OR APPROXIMATELY 200 PER CENT. 

The new option was put to a vote by Comptroller Prendergast. 
It was adopted by 12 votes to i, Mr. Prendergast. Mr. Mitchel 
and Borough Presidents McAneny, Steers, Connolly and Crom- 
well voting in the affirmative. The one negative vote was cast 
by President ?i filler. 

THE THIRD OPTION TAKEN BY THE CITY WAS 
DRAWN AS IF REYNOLDS' DREAMLAND COM- 
PANY STILL OWNED THE PROPERTY, 
BUT IT HAD NOT OWNED IT FOR 
WEEKS BEFORE. 

When this new option was recommended bv the Mitchel-Pren- 
dergast Committee, and voted by the Board of Estimate, the 
Dreamland Corporation was no longer the owner of the property. 
On September 5, 191 1. ownership had passed to Joseph HubeV, 
by Sheriff's deed dated and acknowledged on that day. 

2.3 



NOTWITH STANDING THIS FACT, REYNOLDS GA\"E 
THE OPTION, THE MITCHELL-PRENDERGAST COM- 
AIITTEE RECOMMENDED IT, AND THE BOARD OF 
ESTIMATE VOTED IT, AS IF DREAMLAND WAS THE 
OWNER. 

THE MITCHEL-PRENDERGAST COMMITTEE TOOK A 
STAND AGAINST THE INCOME-BEARING OFFER 
OF 90 ACRES FOR $2,250,000; AND SHELVED 
IT WITH THE 63-ACRE PLAN OF PRESI- 
DENT MILLER. 

The committee rei)orted adversely on the offer of the Brighton 
Beach Racing Association. It raised o])jections to the acquisi- 
tion of the property. It held that it would be almost impossible 
to remedy certain conditions of ^^•hich it complained. 

But no reference was made by the committee to the statement 
of the Brighton Beach Racing Association that the income from 
the hotels and bathing houses was sufficient to cover the carrving 
charges of the entire property, including the interest on the pro- 
posed purchase price. Nor was there any reference to the state- 
ment made by the Association that it was i)ossible at slight cost 
to increase the accommodations of the bathing house from 3.000 
to 8,000 persons. 

The committee also raised objections to the Miller propo.^al 
that the City could reclaim park lands owned by it on the Coniev 
Island water front for $60,000, therebv saving the jmrchase price 
of Dreamland. THE ONE DEFINITE ACT AND PLAN OF 
THE COMMITTEE WAS TO RECOMMEKD AND PUSH 
THE BUYING OF REYNOLDS' LAND. On the other Coney 
Island water front matters, the committee requested further time 
for investigation and fuller report. This request was granted, 
and thereby park plans so advantageous to the City in contrast 
with the Dreamland purchase were sidetracked. For the ]\Iitchel- 
Prendergast Committee i)ermitted these plans for one park of 
sixty-three acres and another of ninety acres at minimum cost, 
to lie dormant, while it proceeded with other steps favoring the 
Dreamland deal. 

THE FOURTH OPTION, THE ONE IN FORCE TO- 
DAY, WAS APPARENTLY DRAWN TO FIT THE 
FACT THE REYNOLDS COMPANY NO 
LONGER OWNED THE PROPERTY. 

On January 12, 1912, still another option was recommended by 
the Mitchel-Prendergast Committtee, and voted by the Board of 
Estimate. The wording of this option is different from that of 
the three previous options. IT INDICATES THAT IT WAS 
DRA\\'N TO FIT THE FACT THAT THE DREAMLAND 
COMPANY NO LONGER OWNED TLIE PROPERTY. 
The first three options specifically stated that they were for prop- 
erty owned by Dreamland. This fourth and last option made no' 
mention of Dreamland as the owner. The description of the prop- 
erty made no reference to the owner. The owner of the prop- 

24 



ertv was not nK'nlioiu-cl in the option, and it is this option which 
is in existence today. 

By recommendation of the Mitchel-Prendergast Committee, 
therefore, the City, on January T2. iot2. accepted from WiUiani 
H. Reynolds, as president of the Dreamland Corporation, an 
option on ]jroperty which rhe company has not owned since Sep- 
tember 5. 191 T. 

THE BOARD OF ESTIMATE WAS IN IGNORANCE 

OF THE REYNOLDS COMPANY HAVING LOST 

OWNERSHIP, BUT WAS THE MITCHEL- 

PRENDERGAST COMMITTEE WITHOUT 

KNOWLEDGE OF THAT FACT? 

But the o};tion on its face shows that it was drawn with full 
knowledge ot the change of ownership, and this fact inevitably 
suggests the following question : 

DID XOT THE AflTCHEL-PRENDERGAST COMMIT- 
TEE HA\^E KNOWLEDGE THx\T WILLIAM H. REY- 
NOLDS' DREAMLAND COMPANY NO LONGER 
OWNED THE PROPERTY? 

At no time was it revealed to the Board of Estimate that the 
property had changed hands. Not until more than a year later, 
when Reynolds was a witness before the Commissioners of Esti- 
mate and Appraisal was the fact of the change of ownership pub- 
licly revealed. A brief drawn by Corporation Counsel Polk sets 
forth the following : 

"Prior to the laying out of this park on the tinal maps of 
the City of Ne\v York,. the Dreamland Corporation, through 
its president and principal owner, had negotiations with the 
public officials relative to the purchase of the propertv bv 
the Citv for park purposes. DURING THE NEGOTIA- 
TIONS IT WAS REPRESENTED TO THE CITY 
OFFICIALS THAT THE DREAMLAND CORPORA- 
TION WAS THE OWNER OF THIS PROPERTY. 
THE CITY OFFICIALS WERE NOT ADVISED THAT 
THE PROPERTY, \\HICH THE DREAMLAND COR- 
PORATION SOUGHT TO SELL TO THE CITY. HAD 
BEEN SOLD AT SHERIFF'S SALE TO JOSEPH 
HUBER AND EUGENE D. WOOD. The attention of 
Mr. Reynolds, the president of the Dreamland Corporation, 
was called to this fact when testifying before the Commis- 
sioners." 

REYNOLDS, UNDER OATH. ADMITS MISREPRESEN- 
TATION, AND TELLS HOW HE "SQUARED 
THE CITY AND ME." 

Reynolds when a witness explanated his failure to inform the 
public officials of the change of ownership, as follows : 

"When I started negotiations with the City the title was 
in the Dreamland Corporation, so that the negotiations were 
started as coming from Dreamland, and ii was subseciuentlv 



that the title went to Mr. Hiiber as that would have mixed 
up the whole proposition, to go before the City officials and 
say Dreamland does not own this property, it has been sold 
by Sheriff's sale and Mr. Huber owns it, you see. so that 
at all the meetings of Dreamland when the resolutions were 
l^assed by the Dreamland Corporation I would have Mr. 
Huber, before I would put my signature as president of the 
Dreamland Corporation on those agreements and bonds I 
gave to the City, I would have him sign similar bonds. They 
were in duplicate so that my position was always such that 
Dreamland could convey a good title to the City and we had 
a title by Mr. Huber, he was a director, and he had been 
made a trustee for Dreamland and the directors in purchas- 
ing this very property at the Sherift''s sale, so that there was 
nothing on my part in wanting to mislead the city officials 
or do anvthing wrong, except that I DID NOT WANT TO 
EMBARRASS THE SITUATION BY SAYING THAT 
THE TITLE WAS TWISTED AND ALL THAT. I 
WAS AFRAID THAT IT WOULD HURT US TO 
SAY THAT THE PROPERTY WAS SOLD BY 
SHERIFF'S SALE AND THAT TITLE W\\S IN 
A PRIVATE INDIVIDUAL, SO HE WAS PRESENT 
AT ALL MEETINGS AND THAT SQUARED THE 
CITY AND ME." 

It was not until November ii, 1912, that Joseph Huber filed 
a claim for the award to be made, or the purchase price to be paid 
for the former Dreamland property. 

HUBER, THE NEW DREAMLAND? OWNER, KNEW 

OF REYNOLDS' MISREPRESENTATION, AND 

REMAINED SILENT. 

On March 24, 191 3, Huber was a witness before the Commis- 
sioners on Award. He was cross-examined on his ownership 
of the property on which the Dreamland Company had given an 
option to the City as the pretended owner, and testified as 
follows : 

Q. You are still the owner of that property. su1)ject to 
the mortgages, encumbrances and tax liens on it ? 
A. Yes. 

Q. So that today your interest in this real property, as 
conveyed to you by the Sheriff's deed, and in the award 
which had been assigned to you by the Dreamland Corpora- 
tion, and your interest in the award aside from that assign- 
ment, are still in you? 

A. Yes. 

Q. You purchased this property at the Sheriff's sale for 
the amounts of the judgments? 

A. Yes. 

Q. You knew, did you not, that Mr. Reynolds in his deal- 
ing with the Board of Estimate and Apportionment repre- 
sented that that company was the owner in fee of that prop- 
erty ; you knew that, didn't you ? 

26 



A. Yes. 

Q. You knew the transactions were carried on in the 
name of the Dreamland Corporation ? 

A. Yes. 

Q. Did vou ever inform the Board of Estimate and Ap- 
portionment that you were the owner of the property? 

A. No. 

Q. And that the Dreamland Corjjoration was not the 
owner ? 

A. Xo, I did not. 
An agreement signed by both Huber and Reynolds on August 
29, 191 1, sets forth how the funds to come from the City are to be 
expended. Unpaid principal and interest on mortgages and 
bonds, of which Reynolds holds $300,750, are to be paid; and 
Reynolds is to receive $15,000 additional for services. Another 
payment is of $5,277.30, with interest since September 28, 1910, 
the amount of a judgment obtained by Paul C. Ertsaas against 
Reynolds, George F. Dobson, Eugene D. Wood, S. S. Whitehouse 
and Percy B. Purdy. 

AFTER THE LAST AND EXISTING OPTION HAD 
BEEN APPROVED, REYNOLDS, STILL PRETEND- 
ING OWNERSHIP, GOT THE CITY TO AP- 
PROVE PROPOSITIONS" PROFITABLE 
TO HIMSELF OR ASSOCIATES. 

On January 25, 1912, Reynolds wrote to Comptroller Pren- 
dergast as if his company still was the owner of the property. 
He made two propositions to the City as if this were true; and 
later the City accepted these propositions. Reynolds' letter is in 
the Board of Estimate minutes for February i, 191 2. 

His first proposition was that if the City would purchase the 
Dreamland site at private sale, the Dreamland Company would 
convey "all its right, title and interest" in a 200-foot strip to con- 
nect the park with Surf avenue. Reynolds was safe in making 
this proposition, as the City's one option at that time, and w^hich 
is the option in force today, w^as for the acquirement of the park 
by condemnation proceedings. 

The second proposition was that if the award by condemnation 
was less than $1,000,000, the City must pay for the 200-foot strip 
the price per square foot paid for the park itself. 

The important omission was that there was no proposition cov- 
ering an award of more than $1,000,000. So that if the award 
were more than $1,000,000. which it ultimately was, a higher 
price could be demanded for the connecting road to the park. 

Another important point in connection with these "proposi- 
tions" is that THE CITY HAD BEEN IX SUCH HASTE TO 
ACQUIRE REYXOLDS' DREAMLAXD THAT IT HAD 
NEGLECTED TO PROVIDE FOR A ROAD TO THE 
PARK. So that when the City was committed finally to the pur- 
chase, and condemnation was under way for acquirement of a 



plot of land cut off Iroin approach, Reynolds came forward to 
give the necessary connecting roadway — for a consideration. 

Reynolds took the position that his '"propositions" were in t!ie 
nature of concessions to the City. So he stipulated that the City 
must huild without assessment on the Dreamland Company, 
cither a street or sidewalk and curb for the improvement of l:!? 
Surf avenue tract not included in the park. 
REYNOLDS' MISLEADING "PROPOSITION" LETTER 

WAS WRITTEN TO COMPTROLLER PRENDER- 
GAST, AND CAME TO BOARD OF ESTI- 
MATE IN ROUNDABOUT WAY. 

This Reynolds letter was not _u'iven to the lioard of Estimate 
by Comptroller Prendergast. the otlkial to whom it was written. 
Instead, it appears in the Board's minutes as part of a communi- 
cation from the Chief Engineer of the Brooklyn Toi)ographicai 
Bureau relative to the City map of Dreamland Park. 

On February 15, 1912, the Board of Estimate adopted a reso- 
lution laying out on the City map the 200-foot strip to connect 
the ])ark with Surf avenue. This action was in accordance with 
the "propositions" made by Reynolds in his letter to the Comp- 
troller. 

As the award on Dreamland Park is still pending, the cost of 
this 200-foot strip remains to be decided. But the commitment 
of the City to pay the same price ])er foot as for the park land. 
and also to build a street or curb and sidewalk to improve the 
.Surf avenue property, remaining in private hands, appears to be 
illegal. Reynolds led the City to this commitment l)y ])retending 
that Dreamland still owned the property, when as a matter of fact 
it had not owned it for nearly six months. 

REYNOLDS WAS REPEATEDLY SUCCESSFUL IN 
HOODWINKING THE BOARD OF ESTIMATE. 

The record as written in official minutes appears to show that 
Reynolds was successful more than once in hoodwinking the 
Board of Estimate. He got the Board to take first options which 
would have made the City assume $1,450,000 in mortgages; he 
got the Board to take two other options on land he or his Dream- 
land Corporation did not own ; he got the Board to agree to pay 
the park price per square foot for an extra 200-foot strip to Surf 
avenue which the company did not own, and in addition for the 
City to huild without assessment on Dreamland a street or a curb 
and sidewalk, im])roving propert\- in ^vhich he himself held in- 
terest. 

On February 27, 1912, Commissioners to take testimon.y and 
make an award were appointed by Justice Marean in the Su- 
preme Court, Kings County. The three Commissioners named 
were David F. Manning, George S. Billings and William Duane. 
On February 6, 19 13, Charles j. McDermott and Ceorge A. 
Steves replaced Manning and Billings on the Commission. 

The Commissioners began hearing witnesses shortly after filing 
iheir oaths of office on March 14, 1912. Delay after delay took 
l)lace, however, and testimony which might be taken in a few 

28 



days was not taken in a year. Meanwhile Reynolds was collect- 
ing his 6 per cent, interest, and this interest continues piling- up 
today. 

THE VALUATIONS ON WHICH THE FIRST AWARD 
OF $1,014,602.32 WAS MADE. 

'J'hree witnesses on valuation testified for the Citv and three 
for the Dreamland Conipan)-. The following table gives the 
values sworn to by these witnesses, and on which the Commis- 
sioners awarded the Dreamland Company $1,014,602.32: 

WITNESSES FOR THE CITY. 

TOTAL VALUATIOX PER 

\'ALUATIOX. SQUARE FOOT. 

Martin McHale $428,025.00 $1-37 

Joseph P. Day 449,225.76 1.45 

John Dunne. .... 

WITX ESSES FOR DREAMLAND. 

H. C. Pyle $1,426,000.00 $4.47 

William M. Greve 1,252,908.00 4.24 

David Porter 1,330.738.00 4.25 

Dunne was the Deputy Tax Commissioner who assessed 
Dreamland for taxation by the City. His sworn valuation 
of all the Dreamland ])roperty was $737,500. 'I'his valuation 
inch;ded the 200-foot Surf avenue strij) not taken for the 
l)arkv and which was stated by the Mitchel-Prendergast 
Committee to be worth $500,000. 

REYNOLDS' LAWYERS WERE AFRAID TO CROSS- 
EXAMINE McHALE, V/ITNESS FOR THE CITY. 

McHale's sworn valuation of $428,025 was not challenged bv 
the lawyers for Reynolds. A brief of the Citv. prepared under 
the direction of P>ank A. Polk, Cori)oration Counsel, states that 
Reynolds" attorneys declined to cross-examine McHale because of 
his excellent qualifications, and adds the following: 

"The City is informed that these attornevs had agreed 
among themselves, before AkPLale vvas called' by the Citv to 
testify in this proceeding, not to cross-examine him. 

"They were afraid to cross-examine McHale and ])rei)ared 
• to take their chances by allowing his testimony to stand un- 
challenged." 

DAY'S CITY TESTIMONY WAS BASED ON ACTUAL 
SALES OF CONEY ISLAND LAND. 

]:)av's sworn valuation of $449,225.76 was shown to have been 
ba.sed on sales_of real estate in Coney Island from Fifth street 
to Sea Gate and lying between Surf avenue and the ocean Thi< 
included the Dreamland tract. Regarding J)av's testimonv the 
Polk brief sets forth the following: 

"the attorneys for t1ie property owners did cross-examine 

29 



Day. The result of this cross-examination was that Day 
demonstrated by sales, by leases and by all other facts ob- 
tainable that had a bearing upon the value of property at 
Coney Island that the valuations testified to by him are just 
and fair and represent the fair and reasonable market value 
of this property, considering it in its most favorable light." 
The three witnesses for the City testified that the Surf avenue 

frontage, which was not included in the park, had a^ value four 

times greater than the land taken by the City. 

PYLE, THE FIRST REYNOLDS EXPERT, HAD MADE 

ONLY TWO SALES OF PROPERTY IN CONEY 

ISLAND IN TEN YEARS. 

Pyle. the first witness for Reynolds, was shown to have made 
only two sales of property in Coney Island, one ten years and the 
other two years, before his testimony. It was also shown that 
he had made no previous appraisals on the ocean or anywhere in 
the amusement section of Coney Island. Notwithstanding these 
facts, he swore that the part of the Dreamland property being 
taken by the City was worth $1,426,000. 

WILLIAM M. CALDER, AT PRESENT UNITED 
STATES SENATOR, WAS NAMED BY GREVE AS 
AN OFFICER OF THE REALTY ASSOCIATES, 
THE BROOKLYN CORPORATION WHICH 
HAS FINANCIALLY ASSISTED REYN- 
OLDS IN HIS LAND DEALS 
WITH THE CITY. 

Greve, who testified that Dreamland had a value of $1,252,908, 
was cross-examined regarding business affiliations with Reynolds, 
Frank Bailey and others either directly or indirectly interested 
with Reynolds in land deals with the city. 

The following extracts from Greve's testimony indicates the 
extent of his business affiliations with the group of Brooklyn land 
speculators in which Reynolds, Bailey and Greve himself are the 
principals : 

Q. Are you connected with any real estate companies or 
corporations here in Brooklyn? 

A. Several. I am second vice-president of the Realty 
Associates ; president of Greve & Co. ; vice-president of the 
Xeponsit Realty Company ; president of the Rockaway Point 
Company ; secretary and treasurer of the Parkway Baths 
Company, and some other corporations whose business is 
not particularly real estate. I have been connected with the 
Realty Associates about twelve years. 
Greve was asked how long Frank Bailey and others had been 
on the Board of Directors of the Realty Associates, and replied : 

"I couldn't tell you; most all have been on — William M. 
Calder is one — ^most of them except Mr. Calder have been 
on a long while." 

30 



GREVE SHOWED A BUSINESS CONNECTION BE- 
TWEEN HIMSELF AND RAE, THE REYNOLDS 
APPRAISER HIRED BY COMPTROLLER 
PRENDERGAST. 

Grcve revealed a business, connection between himself and 
William P. Rae, the Reynolds appraiser hired by Comptroller 
Prendergast to appraise Dreamland for the City. On this point 
Greve testified as follows : 

''1 made a loan for the Realty Associates on property 
adjoining Sea Gate, now owned by a corporation controlled, 
I think, by William P. Rae. I purchased a second mortgage 
on behalf of the Realty Associates and also made a first 
mortgage there." 
Greve, furthermore, was forced to admit that he had owned 
Dreamland bonds, and that he was a stockholder in the Long 
Beach Estates, of which Reynolds is president. In this connec- 
tion the Polk brief for the City states the following: 

"Air. Greve is a stockholder of the Long Beach Estates. 
He was the owner of some of the Dreamland bonds, which 
are secured by the $750,000 mortgage. 

"He testified that he had sold these bonds, but could not 
tell the date of the sale or the party to whom he sold them. 
"THIS RECORD SHOWS THAT HE WAS ASKED 
AT THREE DIFFERENT HEARINGS WHETHER HE 
HAD ASCERTAINED THE DATE THAT HE DIS- 
POSED OF THESE DREAMLAND BONDS AND TO 
WHOM HE HAD SOLD THEM. AND HIS ANSWER 
W^AS ALWAYS THAT HE DID NOT KNOW THE 
DATE OR THE NAME OF THE PERSON." 

GREVE THROUGH A 'DUMMY" HOLDS AN INDI- 
RECT INTEREST IN THE DREAMLAND 
PROCEEDINGS. 

Another admission forced from Greve was that a "dummy" for 
himself, or for a company of which he was part owner, held a 
claim for damage in the Dreamland proceedings. In this regard 
the Polk brief states the following: 

"Mr. Greve is part owner of the leasehold from Gertrude 
Stratton to Catherine Murphy, and also part owner of the 
Twenty in One iVmusement Company, which had an assign- 
ment of the lease from Catherine Murphy, who was a dummy 
for Greve, as the record shows. Either Catherine Murphy 
or the Twenty in One Amusement Company is the claimant 
in this proceeding for an award for damage by reason of 
the ac(|uisition of Damage Parcels Nos. i and 2 (the Dream- 
land parcels)." 

Despite all these revelations, Greve was permitted to give de- 
tailed testimony on Dreamland values, and Reynolds' lawyers 
based arguments on his testimony in favor of a large award. An 
estimate of the real merit of Greve's testimony is shown by the 
fact that he valued Dreamland $238,300 over and above the 
award, which the Supreme Court set aside as "largely excessive." 

31 



Uii Ajjnl 5, 1915, the Commissioners made the award of $i,- ': 
.014.602.32. A.S their oaths of office had been filed on March 14,^; 
1912,^ it had taken them more than three years to arrive at this^''" 
decision. This protracted delay not only meant the piling- of 
interest charges on the City, but additional expense in feel to 
•the Commissioners. 

On October 15. 1915, an order of the Supreme Court of Kino-s 
County was filed in the office of the County Clerk, Kino-g County, 
confirmincr the award. The order was signed bv Justice Black- 
mar, the same justice who confirmed the\great award on Rock- 
away Park. The order was appealed In- Corporation Counsel 
Polk. 

FOUR SUPREME COURT JUSTICES FOUND THAT 

THERE HAD BEEN AN AGITATION FOR THE 

CITY TO BUY DREAMLAND. AND THAT 

REYNOLDS WAS MUCH INTERESTED 

IN ADVANCING THE PROJECT. 

On 3^1arch 17, 1916, Justices Jenks, Thomas, .Mills and Rich, ' 
in the Appellate Division of the Supreme Court, reversed the 
finding- of Justice Blackmar. The opinion setting aside the award 
was wrtten by Justice Mills, and was, in part, as follows: 

"I am very strongly impressed that the purchase by or for 
the Dreamland Corporation in 1903 or 1904 was at the then 
full value of the land ; and the evidence warrants no conclu- 
sion that there was thereafter any such increase in valtie as 
indicated by this award. 

''It seems evident that after the fire in May, 191 1, which 
almost totally destroyed the structures upon Dreamland, so 
that that corporation collected some $375,000 insurance, and, 
in October, 1912, still had $25,000 more of it due, agitation 
soon began for the taking of these parcels by the City for a 
public park. 

"Mr. Reynolds, ])resident of Dreamland, evidently was 
much interested in advancing the project." 

THE FOUR JUSTICES WERE STRONG IN THE OPIN- 
ION THE AWARD WAS "LARGELY EXCESSIVE," 
BUT REYNOLDS CONTINUES TO DRAW 
HIS 6 PER CENT. INTEREST. 

Finally, the justice stated that it was his "strong opinion" that 
the award for Dreamland was "largely excessive," and the other 
justices concurring in this opinion, the award was set aside. 

Justice Carr was the sole member of the court who did not 
concur in the ruling opinion. 

The justices on April 7, 1916, appointed William C. Beecher, 
Thomas O. Callender and Arthur S. Somers as new commission- 
ers. The Commissioners took their oaths of office on May 15, 
1916. 

At the end of a year this new commission has not heard all of 
Reynolds" witnesses and has! not heard one witness for the City. 

Day by day, however, the 6 per cent, interest piles up in Reyn- 
olds' favor. 

.32 



LIBRARY OF CONGRESS 



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